September 2009

September 25, 2009

As the housing market seems to be finding a bit of a bottom, many first-time home buyers are beginning to seriously look once again for a residence they can call their very own.Their most current inclinations are spurred on in no small way by the availability, until November 30, of the $8,000 federal tax credit that was created precisely for first-time home buyers.Unfortunately, some well-intentioned folks are wasting precious time choosing among what is arguably housing’s best deals, short sales, for which to make their offers.In the end, a good deal is only that if it comes to fruition, and short sale transactions are both troublesome and lengthy.When you see that a listing has been approved for a short sale, that only means that it’s been approved in principle; that is, the lender is open to considering taking less than what’s currently owed, but doesn’t guarantee that they will, or even guarantee they’ll take the bargain price for which it’s currently listed.Short sale listings usually contain the disclaimer that the lender must approve the offer, which tells you that even an offer that matches the list price may be turned down.Short sale transactions, from start to finish, can often take many months, and what’s more, until the actual closing, the deal can fall through at any time along the way.Most realtors I speak to nowadays won’t bother with them anymore, so problematic have they proven to be.

In the current climate, it’s not unusual for a perfectly normal deal to take 1-2 months to be completed, from start to finish.This means that in order for you to collect your $8,000 tax credit, you should ideally go to contract no later than about October 15, which would give you about a month and a half to get things wrapped up.That won’t happen if you chase a short sale or other distressed property, so remember that as you salivate over the ridiculously low prices that will understandably catch your eye right now.

September 06, 2009

Real estate is not a national market, and I’ve always taken issue with the presentation of it as such.There are simply too many highly-influential factors that exist at the local level to justify evaluating the quality and stability of a real estate market as though it is a national one.For example, Amarillo, Texas’s historically modest real estate prices and low unemployment through this Great Recession contributed to a 3% rise in median home prices in that community from June 2008 to June 2009, while the “national average” for the same period saw median prices decline 15% nationwide.While there is, of course, important component data that comprises national real estate figures, presenting that data in the form of a single number can be misleading, at the very least.

That said…even I have to grant some significance to the recent trend of the U.S. real estate market’s attempt at potent truth serum, the S&P/Case-Shiller U.S. National Home Price index, which has not been historically kind in its measurement of the “national market” in many, many months.Last week, the index noted the first quarter-on-quarter increase in values (Q1 to Q2 2009) in three years.Information like that should not be wholly embraced, but neither can it be wholly disregarded.When you also consider collateral information from other weighty resources, like the National Association of Realtors’ report of an increase in the sales of existing homes at a rate of 7.2% from June to July, it’s hard to disagree with those who say we’ve turned the long-awaited corner in residential real estate.

There are still warnings being sounded by those who see a worsening of the foreclosure mess over the next 12 months, and while that may prove to be true in some areas, it’s getting more difficult to believe that prices will resume any sort of free fall.The simple truth is that there’s no reason to think that we haven’t realized stabilization, which means it’s time for those who’ve been fence-sitting for some time to at least climb down from their perches, get back in their cars, and resume touring America’s neighborhoods.